Skills Shortage Set to Cost UK SMEs Around £145,000 Within the Year

The current skills shortage is expected to cost UK businesses an average of £145,000 within the next year. The alarming figures come from the 2020 Salary Guide, released by UK recruitment firm Robert Half.

The same report suggests that this figure is expected to more than double in the next five years, costing SMEs around £318,000.

What’s causing the UK skills gap?

The widening skills gap is thought to be attributed to three main factors:

• Further digitalisation of the working world
• Various economic influences
• A reduced talent pool as a result of Brexit reverberations

The study found that 3 out of every 5 business owners believe a recession would have a negative impact on the skills gap. Nearly half (47%) feel Brexit will be detrimental to their business.

Whilst the widest gaps are in data analysis and digital skills, insufficiencies also extend to more behavioural characteristics such as resilience, adaptability to change, and critical thinking.

According to the research, nearly all (94%) of CFOs want to see an improvement in the resilience of their teams.

Sinking productivity and rising costs

The UK currently has some of the lowest reported productivity levels in the G7. As a result, business owners are experiencing additional costs in efforts to upskill their teams.

More than 60% of business owners are planning to train existing staff in addition to hefty recruitment drives to fill the gap. Research found that 42% are planning to hire permanent staff and 27% intend to enlist the extra skills of temporary staff.

What is the solution to the UK skills gap?

Employers are reporting high numbers of job applicants being seriously underqualified or inexperienced for the role. It means that the competition for the right candidate can be pretty fierce in some sectors.

The overall solution for plugging the skills gap will need national attention; education syllabus, experience opportunities and so on. But for firms to compete now, there are still options, but all too often, they’re not cheap.

Solutions include powering up the package offered to candidates in order to attract the best talent. Induction programmes could provide on-job training to the best applicants, though this could effectively see juniors competing directly against each other. Not the best atmosphere in an environment where teamwork is essential.

Is your business feeling the effects of the skills gap? We’d love to hear from you, and what steps you’ve been able to take to help.

Elizabeth Hughes

A content writer specialising in business, finance, software, and beyond. I'm a wordsmith with a penchant for puns and making complex subjects accessible.

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